Tips About Your Free Annual Credit Report

Did you know a review of your free annual credit report can save you thousands upon thousands of dollars? That is a staggering thought in itself; don’t you agree? But there is something worse; that can be happening to you. Your personal reputation and good credit could be ruined forever. You can lose your personal reputation and thousands of dollars if you don’t know someone stole your identity. The following tips will help to keep this from happening to you.

Identity theft has become an illegal enterprise which has profited the thieves to hundreds and hundreds of millions of dollars a year. One of the main reasons it has become so profitable is that people, just like you, have no idea their identity has been stolen. The first way you may find out about it is when the following scenario’s or something similar happen to you.

One evening you and your family are setting in the family room watching a little TV and relaxing. Suddenly you get a phone call from a mortgage company, which you know nothing about, wanting 90 days of back mortgage payments. As you’re standing there in confusion and disbelief this guy is telling you, if you don’t pay, legal action will be taken.

If not that scenario, then perhaps you get a credit card bill for a credit card you have never seen. You open the bill and there is $5000.00 worth of charges for electronics charged against your name. It also shows you are more than 60 days delinquent in payments. It is mind numbing and debasing to you and your family. Your first thoughts are how could this happen?

Chances are if this happens to you it is because your personal identity has been stolen. This thief has used your social security number, your driver’s license number, date of birth and other personal information to get approved for the credit card or loan. The many ways this can be done are beyond the scope of this article. However, there is a way you could have been alerted much sooner and perhaps shut it down before all the damage was done.

In July of 2005, the Federal Government of the United States, passed legislation that gave every citizen in the United States, including you, to be able to get a copy of their free annual credit report. All you have to do is go on-line, write or call and request a free copy from the following 3 major credit reporting agencies:

1. Equifax: http://www.equifax.com/home/  Phone:  1-800-525-6285
2. Experian: http://www.experian.com/   Phone: 1-888-397-3742
3. TransUnion: http://www.transunion.com/ Phone: 1-800-680-7289

Not only can you get your free copy of your credit report, each of these credit reporting agencies, have other programs which can help you. In case of Identity theft they have free information on how to repair your credit report. They offer 24 hour monitoring of your credit report. In addition they provide other programs which can help keep your credit rating safe.

For instance you can put a freeze on your credit report. This prevents anyone from checking your credit without your express approval. However, just for your information a freeze can also slow down the process when you apply for new credit.

As you can see, by learning about your free annual credit report, you have other services from the Big 3 which can help protect you. If you suspect fraud, identity theft and are suddenly getting approved for credit cards and other loans; it’s time to grab your free annual credit report.

Credit is another word for borrowed money. Credit borrowing puts money in your bank account to spend and that is why we talk of getting “credit”, and “credit cards”.

Credit is valuable to us all for the freedom to spend when it is important to do so. The quality of life of previous generations was reduced by their inability to sensibly gain access to basic credit facilities. The importance of how much credit you have and how you use it goes far beyond shopping, and can for example aid borrowers immeasurably during ill health, and aids entrepreneurial development to a surprising degree.

Whether you have a good or poor credit record can affect where you live and even where you work. This is the case for example, if your credit record is considered by prospective employers. For this reason, and the fact that creditworthiness has begun to permeate so many areas of everyone’s financial life you need to understand how credit is awarded or denied, and what you can do if you are treated unfairly.

The major US laws that regulate credit are as follows:-

Fair Credit Reporting Act
Equal Credit Opportunity Act
Fair Credit Billing Act
Fair Debt Collection Practices Act.

It is a good idea to find out a basic understanding of these Acts, and this can be achieved by searching Google and other internet search engines.

Creditworthiness

The credit score is a “grade” of creditworthiness. Individuals with good credit scores can obtain credit more easily, and at lower interest rates.

The credit bureaus, who hold the data about our spending behavior, were recently criticized by the national mortgage brokers’ association for selling “trigger lists” containing personal and financial information on prospective borrowers to sub-prime real estate lenders. These were introduced in 2005 by Experian™. Their basic trigger list includes the names and contact information of people who recently applied for a mortgage. It may come as a surprising thought that many companies seek out this information, but it is a clear pointer for targeting market individuals who will tend to need to purchase whole range of goods, and will usually be creditworthy. So, be aware that credit records have this very wide variety of uses these days.

If for any reason your credit record becomes damaged you will be wise to embark upon a period of credit improvement. Shopping trips to big malls don’t help us to maintain good credit ratings, but neither does years of traveling to visit far-flung friends, multiple bouts of moving expenses while job hopping from city to city, or those career stops for more education which are taken by many of us. Nowadays, for many Americans these sorts of events have become normal, so don’t depress yourself by being excessively critical of yourself if, for you, this has resulted in bad credit.

The credit report improvement process is also very do-able. It is different for every client and depends on the amount of negative and indeed quite possibly incorrect information listed in your credit report. Indeed, some negative items can be removed in as little as 3 months, by taking advice and using and repaying credit – possibly through actions like the use of prepaid credit cards.

The Credit Crunch

The so called “credit crunch” is the reduction in credit available which has resulted from imprudent lending by banks to a section of the community which in times gone by would not have been able to borrow money to buy themselves homes, or for other purposes.

These are people who have not been particularly responsible in the past with their money held less than optimum credit ratings. However, with the economy stable in the mid-2000s for a long period, the bank lending community became rather too keen to lend to such people. They were enticed by the ability to charge higher interest rates than made available to more credit worthy individuals. However, once harder times hit the US from 2006 onwards these very people became the first to suffer from the economic slowdown. Defaulting rates on these loans rose, and the interbank lending which in the past provided the money-lenders with the cash to sign up these loans, suddenly decided they could no longer risk their money with these “sub-prime” lenders. The result is what has been termed the “credit crunch”.

The economic slowdown has also brought many professionals down on their luck. Banks withdrew credit lines and the interbank lending market froze up. The US central bank – the Federal Reserve – desperately scrambled to restore calm but without success.

However, US entrepreneurship is not yet dead. Entrepreneurship is often stimulated by hard times, and this could be a saving grace that my yet revitalize the US economy. The shake-out should not only provide them with new opportunities, but as those with drive and talent develop new businesses they will create more jobs for others as well. Before you know it, the credit crunch could end up actually stimulating the economy instead of the other way around.

Checking your credit report regularly for errors and having misinformation corrected immediately can minimize surprises. However, when you go to look for free credit reports be careful not to submit your details to one of quite a number of scam internet sites, – so called free credit card information providers which are nothing of the sort. Always remember that there are just three main nationwide credit bureaus that compile credit report information, and no more. Anything else is a scam.

Shop for the credit terms that best meet your borrowing needs without posing undue financial risk. And remember; failure to repay the amounts you’ve borrowed, plus interest, will certainly damage your credit record and could ultimately mean the loss of your home.

Steve Evans has produced a free video about debt repayment which is called “Paying of Your Debt Fast.” Simply solutions for all those with a debt problem.

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